Rents rise at the quickest pace since 2016

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The UK’s renters have seen average rent prices rocket by 5.1% in the year to June, the highest annual increase since the records began in January 2016.

The rise was even steeper in Wales and Scotland, where rents jumped by 6.7% and 6.2% respectively.

View Full Article: Rents rise at the quickest pace since 2016

LANDLORD: ‘Why I’ve been exiting residential and moving into commercial property’

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A leading portfolio landlord in Northern Ireland has vowed to focus on the commercial sector after becoming fed up with the UK’s overbearing tax regime.

Ian Jackson, a Belfast-based property investor and consultant, has offloaded all but 40 of his 142 residential properties in the last few years – 20 of them in the last 12 months – and has started buying commercial properties instead.

“I’ve had to rethink my tactics which was driven by the changes such as Section 24,” he tells LandlordZONE.

“I bought commercial buildings some time ago but have decided to revisit that because the sector isn’t as affected by the tax issues and there is less interference – although it is still challenging, with different pitfalls.”

Jackson has properties in Northern Ireland, Manchester and Scotland which means dealing with three different governments, none of whom are interested in what landlords think.

This is a mistake, he says. “They’ll find out the hard way that zero foresight will cost them more than the extra tax from landlords.

Snapped up

The properties I’ve sold have usually gone to homeowners, which means there are fewer rental properties on the market, while every time we put something on for rent, it’s snapped up in a day.”

Jackson says the housing shortage is here to stay and doesn’t believe government will catch up, ignoring the warning signs and even hard data as they chase votes instead.

He reckons this attitude is particularly hard on new investors with less capital, so that anyone putting money into property will now be questioning their decision.

“It’s taking way too long for landlords’ voices to be heard. It may be too late for landlords like me who are wanting to get out, but the government certainly needs to support younger investors,” he adds.

Find out about protecting your commercial property.

View Full Article: LANDLORD: ‘Why I’ve been exiting residential and moving into commercial property’

Police forces launch cannabis farms campaign targetting landlords

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Police forces across four big UK counties have united to urge landlords and letting agents to join them in their fight against cannabis factories in rented properties.

Four Police and Crime Commissioners or PCCs (main picture) in the southwest counties of Wiltshire, Avon and Somerset, Devon and Cornwall are calling on landlords, letting agents and housing companies to help them drive drugs off the region’s streets.

Specifically, the commissioners want those who rent properties to identify and report suspected cannabis farms.

They are also asking landlords to write to their national trade to raise awareness and ask for greater collaboration to fight cannabis cultivation in communities.

The initiative is part of a region-wide drugs campaign by the commissioners and their police forces known as Operation Scorpion.

It is focussing on the supply chain by organised crime groups and associated crime, in particular cannabis cultivation.

The latest aspect of this is targeting the private rented sector, with landlords and agent being asked to watch out for:

• Tenants who ask for complete privacy – requesting no periodic inspections.
• Blacked out windows and frequent visitors throughout the day and night.
• Light source coming from a property even during the night.

The campaign also includes how letting agents housing companies have a legal obligation to report any concerns, what information should be reported and how to file a report.

Wiltshire Police and Crime Commissioner Phillip Wilkinson (third from left), says: “Communities where drugs are cultivated and dealt are simply fed up with the misery this type of crime brings to their doorsteps.

“Criminals target properties for cultivation and we are calling on all landlords, letting agents and housing companies to be wise to the types of activity that could be happening in their properties.

“This is why we must tackle the issue of cannabis cultivation head on, and this collaborative approach between myself and the other PCCs reinforces the message that no matter where you live in the South West, there is no place for drugs.”

Read more: Landlord who allowed property to be used as cannabis farm jailed.

Main picture: David Sidwick, Dorset PCC, Mark Shelfold, Avon and Somerset PCC, Philip Wilkinson, Wiltshire PCC and Alison Hernandez, Devon and Cornwall PCC

View Full Article: Police forces launch cannabis farms campaign targetting landlords

Co-Op Bank gets in bed with Shelter to make wild claims

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First, it was a claim by Generation Rent that families are being evicted every 15 minutes – but now Shelter has gone one better by saying a family is evicted every EIGHT minutes in England.

The charity says it has calculated the figure by using the number of families living in the private rented sector from the English Housing Survey –

View Full Article: Co-Op Bank gets in bed with Shelter to make wild claims

Co-op Bank and Shelter slam Government over stalled evictions reform

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Shelter has this morning launched a campaign in partnership with the Co-operative Bank to persuade the Government to press ahead with its proposal to abolish Section 21 evictions.

The two organisations have launched a PR stunt on Parliament Square today covering it with 172 cardboard boxes, each one representing the number of families evicted by private landlords every day.

This figure is based on Shelter’s analysis of a YouGov poll, funded by The Co-operative Bank, that reveals more than 188,000 private renters with children have received a no-fault eviction notice in the last three years.

Shelter says it is frustrated that the Government’s Renters (Reform) Bill, which entered parliament in May this year, will now not see its second reading until after the Summer recess.

It includes the proposals to ban ‘no fault’ Section 21 notice evictions which many landlords rely on to remove tenants in breach of their contracts.

Failing renters

Polly Neate (pictured), Chief Executive of Shelter, says: “The government is failing renters by stalling on the Renters (Reform) Bill.

“For each day that MPs are off on their six-week summer break, another 172 families will be hit with a no-fault eviction notice, giving them just two months to pack up and leave their home.  

“With private rents rising rapidly and no genuinely affordable social homes available, those with an eviction pending face an increasingly hostile situation.  

Fighting talk

Nick Slape, CEO of The Co-operative Bank, adds: “Fighting poverty and inequality across the UK is extremely important to our customers, and that’s why we’re campaigning on this issue alongside Shelter.  

“We were encouraged to see this bill brought to parliament, but we need to see tangible action from the government now. Families across the country are depending on it.” 

View Full Article: Co-op Bank and Shelter slam Government over stalled evictions reform

Government reveals EPC cost upgrades for PRS homes

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Energy efficiency improvement costs for some private rented sector homes could cost nearly £15,000.

The English Housing Survey for 2021-2022 reveals 19% of PRS homes could cost between £10,000 and £15,000 to improve to at least an EPC rating of C.

View Full Article: Government reveals EPC cost upgrades for PRS homes

Government to consult landlords on looming ‘eVisa’ Right to Rent check changes

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Landlords are to be asked how looming changes to the Right to Rent scheme will affect them, the Government has revealed.

In a statement to parliament, Minister for Immigration (and former housing secretary) Robert Jenrick (main picture) said the transition from physical biometric immigration documents to entirely digital eVisas by 2024 is likely to impact landlords and letting agents conducting Right to Rent checks via a new digital system.

The consultation is due to start soon and will ask landlords whether the understand the changes, and how they’ll impact how tenants are checked.

These changes carry risk for landlords. If they do not conduct Right to Rent checks thoroughly enough then they face considerable fines and even criminal prosecution.

For example, if a landlord is found to be renting to someone who does not have a right to rent, they may be liable for a civil penalty of up to £3000 per tenant.

And if they are proved to have done so knowingly, landlords may also be committing a criminal offence under section 33A of the Immigration Act 2014.

eVisas

Jenrick said: “Since the introduction of biometric immigration documents in the form of eVisas, the Code of Practice needs to be updated to fully reflect the specific elements and approach to eVisas.

“This includes updating the requirements and sanctions associated with holders of these accounts. To ensure they are effective and proportionate, I am launching a consultation on these changes.

“It will explore how these sanctions would potentially be understood and effect individuals, including those who are vulnerable.

Read more news about Right to Rent checks.

“It would also explore how the sanctions may impact groups linked to the holders of eVisas [such as] employers, landlords and financial institutions.”

Read more about the Right to Rent Code of Practice.

View Full Article: Government to consult landlords on looming ‘eVisa’ Right to Rent check changes

EXPERT: ‘Binning Section 21 won’t help as many tenants as campaigners hope’

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Section 21 is the biggest headline grabbing element of the Renters Reform Bill but will be the least effective pieces of the legislation.

That’s according to letting agent Kristjan Byfield (main picture), co-founder of Base Property Specialists, who believes the changes will only affect a tiny percentage of the tenants it sets out to protect.

He says it’s estimated that between 85-90% of all tenancies are ended by the tenant, while other reasons for taking a property back such as wanting to sell constitute another 5-6%.

Breach

“Section 21 when used by a landlord or letting agent is perceived to be an easier way to remove a tenant who is in breach of contract [for non payment of rent usually],” said Byfield during an interview by property portal Zoopla.

“At the moment they have to be at least two months in arrears to start an action and two months in arrears at the point your hearing happens – a lot of tenants play the game with that.”

With the onus instead on repetitive arrears under the new bill, it should help landlords and agents, he said.

“We have one tenant we’re pursuing through the courts for Section 21 and their rent arrears go up to three months then back to one.

“It’s a difficult battle but with the new legislation we hope we’ll be in a much stronger position with tenants like that in future.”

Decent homes

Byfield added although it’s disappointing that preventing tenants from living in a property without mould and heating needs to be legislated, the bill sets a clear framework.

“It’s really important for private landlords to understand as there will be more technical requirements for what is considered a decent home, a suitable response as to what gets reported and that you’ve made an effort to address it.

“A lot of landlords will need to pull their bootstraps up because an attitude of ‘I’ll get to it when I get to it’ is not going to fly.”

Read more about handling the evictions process.

View Full Article: EXPERT: ‘Binning Section 21 won’t help as many tenants as campaigners hope’

Think tank predicts shock 25% drop in house prices

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Rising interest rates threaten to slash the value of homes by up to 25% in the biggest drop in wealth seen since WW2, one think tank warns.

A new report by the Resolution Foundation and the abrdn Financial Fairness Trust found that higher borrowing costs have already wiped out £2.1 trillion of household wealth in just one year.

View Full Article: Think tank predicts shock 25% drop in house prices

LATEST: Rental homes stock plummets by 35% to four-year low

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The number of available private rental homes has dropped by more than a third since 2019 to a 14-year low.

Only 241,000 PRS homes were available last month compared with 370,000 in June 2019, a fall of 35%, according to consultancy TwentyCi which analysed UK rental data from estate and lettings agents and online property portals. 

Chief customer officer Colin Bradshaw says mortgage affordability has dropped dramatically in the last two months, undermining landlords’ business models and causing some investors with rental property portfolios to sell up.

“The yield position on any asset that you own where it’s mortgaged is likely to be severely eroded,” he told the FT.

Average buy-to-let mortgage rates jumped sharply this week, hitting 6.9% for a two-year fixed rate deal, up from 6.6% last week, according to data provider Moneyfacts.

As stock levels have dwindled, rents have risen sharply, reports TwentyCi which says rental prices have gone up by 23% since 2019. 

Renters

“Availability is reduced and affordability is down,” adds Bradshaw (pictured). “There are fewer properties and they cost more. That’s not great for renters.”

His firm’s data also points towards a big difference in the availability of homes to rent at either end of the price spectrum.

For premium properties renting at £3,000 a month or more – a market dominated by central London – availability has risen by 41% since 2019.

For those wanting to pay less than £800 a month, there are 32% fewer properties than just a year ago and 65% fewer than pre-pandemic.

The combined issues of availability and affordability means that renters will stay in properties for longer; in 2019, the average rental length of a tenancy was 3.6 years but today it is 4.8 years.

Read more: How much rent to charge? Some things to consider 

View Full Article: LATEST: Rental homes stock plummets by 35% to four-year low